If you have no idea how inflation works you have no shot at making it on this day and age where every entity around you, is against you. Banks, the government, the FED, the SEC, society's good practices... everything is against you and you will never make it out of the rat race unless you start understanding money.
Imagine inflation as that sneaky bandit who tiptoes into your piggy bank when you're not looking. Slowly but surely, it steals the purchasing power of your precious money. In this adventure, we'll unravel the mystery of inflation and how it's playing a role in the economic drama of the United States, especially in the context of the current inflationary scenario and its intricate dance with gold.
The Shrinking Value of Minimum Wage
Let's hop into our time machine and zoom back to 1963 when the U.S. minimum wage was like having five magical silver quarters, making you feel richer than a pirate with a treasure chest. Fast forward to today, and those same quarters should make you feel like a treasure hunter, right? Well, not really. According to the U.S. Consumer Price Index (CPI), that $1.25 you had in 1963 can only buy you about $10.81 worth of goodies now.
Imagine you had a friend who gave you $1.25 back then, and another friend who gave you the equivalent in silver quarters. You'd be doing cartwheels with the silver, but the plain old paper money would leave you hanging. That's inflation, my friends – the sneaky bandit that makes your money feel like it's on a crash diet.
The Widening Income Gap
Now, here's the real twist in our story. That $14.19 difference between the value of those five silver quarters and the CPI-adjusted value of the minimum wage? It's like a magic trick where the top 10% of earners in the United States get the disappearing act, leaving the rest of us scratching our heads.
This magic show has contributed to the highest income inequality in nearly 100 years – yeah, you read that right, a whole century! It's like some folks got the golden ticket while the rest of us are stuck in line waiting for cotton candy. And guess what? The common folk are not getting their fair share of the cake because the labor share of corporate profits is at its lowest in ages. It's like baking a cake, but only a few get to taste it.
Political Dysfunction and the Common Folk
Hold on to your hats, kiddos, because this plot thickens. The growing income inequality and the disappearing labor share in corporate profits have thrown the United States into a bit of a political pickle. It's like trying to untangle a bunch of kite strings – a real mess. This political dysfunction makes it as tricky as catching a greased pig for policymakers to fix the root causes and come up with superhero solutions.
So, while the common folk are juggling the struggles of inflation and income inequality, the powerful and wealthy are having a feast. It's like inviting everyone to a party but only setting the table for a few. Talk about unfair!
Adding Gold to the Mix
Now, let's sprinkle a bit of gold into our story. Gold has been like a wise old wizard in this economic tale, playing its part especially when inflation is running wild. When people get nervous about their money losing value, they often turn to gold. It's like a superhero cape for your finances, offering a hedge against the inflation bandit.
Inflation isn't just a bedtime story – it's a real-life adventure that affects how much candy you can buy with your allowance. It's time for the grown-ups to put on their thinking caps and find ways to make this economic tale end with a happily ever after for everyone, not just the ones with the biggest piggy banks.
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Very informative post 📯
Glad you liked it man!
Its sad this is the kind of things that dont teach at school, well I never learn this until I was a grown up, no at the university neither since my career was not related to finance and now days their still many who have no clue about inflation, I have learn just enough to know that I cant hold everything on Fiat and savings is just a thing of the past, always need to keep hustling 🤑
Pretty much, the system wants us poor and ignorant, dependent on them to thrive. This is why everyone is so comfy, because daddy govvy takes care of everything
Money will never be taught in school and people will always find it hard to understand money. As long as civil servants are comfortable with their paycheck they will continue running a rat race. That's what Robert kiyosaki says. Fiat keep depreciating due to inflation. Is time to invest in something better than fiat.
They don't want us to learn about money and being independent, they want us ignorant, relying on the system to keep going, which would put them in the power spot forever.
Yeah, but unfortunately for them many of us are learning a way out.
I think unless the parents have invested into some recurring income asset, there is going to be tough time bringing kids into workforce in the age of the automation. Some of the time I feel like these cryptos are the saviors of the new gen if they wish to handle the automation based world and lack of jobs in upcoming times. I wonder what to expect of the jobs and service market in 2030.